New rules might quiet corporate lobbyists' influence

Thursday

Dec 27, 2007 at 12:01 AM

WASHINGTON — A decade-long boom for corporate lobbyists in Washington is showing signs of quieting down, just as tougher congressional rules threaten to muffle the multibillion-dollar industry even more next year.

DIBYA SARKAR

WASHINGTON — A decade-long boom for corporate lobbyists in Washington is showing signs of quieting down, just as tougher congressional rules threaten to muffle the multibillion-dollar industry even more next year.

The new rules mandate more detailed disclosure of lobbying activities, industry oversight by the Justice Department and penalties of up to $200,000 for violations. They will force corporations and trade groups to provide more precise spending records and to take a harder look at who is lobbying for them.

Reports for spending in the second half of 2007 are due by Feb. 15. But under the new rules, which take effect Jan. 1, lobbyists and companies must now file quarterly reports.

The lobbying reforms come as corporate spending habits appear to be shifting. Since the late 1990s, total expenditures grew by about 80 percent and, in some years, at an annual clip of 12 percent, according to the Center for Responsive Politics, a watchdog group that tracks such expenses.

K Street's river of cash hit record levels in 2006, as its two main tributaries, corporations and trade associations, helped bring the high-water mark to a record $2.63 billion in reported spending.

Corporations and trade groups accounted for about 70 percent of that.

Unions, professional associations and other organizations comprised the remaining 30 percent.

But in the first six months of 2007, spending — based on disclosure reports filed with Congress — reached $1.34 billion, only 2.3 percent higher than the same period last year.

A slower pace, to be sure, but still an impressive amount of influence, coming in from myriad sources, to monitor. The new rules are meant to do just that.

"The increased precision in the reporting requirements may reduce the overall amount that is reported because currently people are over-reporting lobbying income and expenses," said attorney Craig Engle, a registered lobbyist with Arent Fox LLP.

He expects a smaller community of lobbyists with a slightly slower spending rate.

That prediction isn't shared across the industry. Several experts and lobbyists said that no one really knows what impact, if any, the rules will have on spending. Some experts said lobbyists might expand their repertoire to activities they aren't required to disclose, such as "grassroots" campaigns and advertising.

As lobbyist activity largely follows congressional priorities, annual spending predictions can be difficult. But experts say several factors, such as market saturation, can't be ignored as potential sands in the wheel.

Much of the past decade's explosion can be traced to a need for better representation, said Jeffrey M. Berry, a Tufts University political science professor and expert on interest groups.

Now that most trade groups and corporations are well represented, he said, Washington might be in glut territory.

Former Clinton administration official Jack Quinn, who co-founded one of Washington's most influential lobbying outfits Quinn Gillespie & Associates LLC, said it stands to reason "almost arithmetically" the industry is reaching a limit.

"But, look, there's a lot of business in the field," he said. "There's a lot to be done."

There are nearly 36,000 registered lobbyists, more than double the number in 2000, according to the Senate public records office's most recent estimate. Some experts say that number is inflated by duplications and outdated registrations.

The new lobbying rules — an outgrowth of corruption scandals involving lobbyist Jack Abramoff and several U.S. lawmakers — are designed to enhance transparency, not curb lobbying. They take effect Jan. 1.

James Thurber, an American University professor who teaches government, calculated that about 84,000 people work in the business — including lobbyists, their staff, pollsters and others — which, he contends, is the third-largest Washington industry behind government and tourism.

Thurber, who has testified several times before Congress for reforms, said there still is not enough transparency in the system.

Wielding influence through grassroots campaigns, building coalitions, advertisements, conferences, surveys and white papers, thousands are not counted as lobbyists. That's an oversight, he says, the new rules fail to address. Some might even finagle an invite from a lawmaker to a meeting on the Hill to avoid having to register as a lobbyist, he said.

"They're going to be more and more creative about this," said Thurber, who is writing a book about lobbying.

Several lobbyists said their "get-the-word-out" tactics are varied, but face-to-face meetings with lawmakers still trump all. And that will not change.

In any given year, corporations mobilize for or against issues that could acutely affect them.

Private equity and hedge fund firms, such as Blackstone Group L.P., this year emerged from relative obscurity to fight legislative efforts to raise the tax burden on their companies and executives.

Financial services and technology firms, including Apple Inc. and Microsoft Corp., squared off against pharmaceutical and biotechnology companies, such as Johnson & Johnson and Amgen Inc., on patent reforms.

The youthful and relatively regulatory-free tech industry has not racked up the lobbying expenses of other industries — yet. But it is picking up Beltway habits. Mountain View, Calif.-based Google Inc. established a Washington presence two years ago, but only recently registered in-house lobbyists.

Mary Boyle, spokeswoman for Common Cause, a public-interest group, said industries' lobbying dominance comes at the expense of the public.

For example, the mortgage lending industry's lobbying activities might have contributed to the current housing crisis, she said, because it blocked Congress from taking action to restrict lending abuses and protect homeowners, she added.

"Everyone certainly has a right to lobby, but special interest lobbying must be balanced by having the public's interest represented on the Hill," Boyle said. Common Cause has spent $140,000 in lobbying expenses so far this year.